Salehi's announcement came just a day before Iran is to continue stalled nuclear talks with the so-called P5 plus 1 countries -- Germany and the permanent members of the U.N. Security Council: the United States, China, Russia, France and the United Kingdom.

That's no coincidence, CNN's Reza Sayah says. Iran wants to show that despite ever-tighter sanctions, it is not negotiating from a position of weakness.

The United States was not surprised by the announcement, National Security Council spokesman Mike Hammer told CNN.

"Iran has been trying to develop an indigenous program for years given that the import of yellowcake is banned by United Nations Security Council resolutions," he said.

But he said the move raises further concerns about Iran's intentions, "given that Iran's own supply of uranium is not enough for a peaceful nuclear energy program."

That mine is too small to produce all the yellowcake for a nuclear energy program -- Iran's official reason for building nuclear reactors -- but could be useful for a secret nuclear weapons program, nuclear expert David Albright told CNN.

"The Gachin mine is tiny relative to what is needed for a nuclear power program," he said. But it "could be significant from the standpoint of a covert nuclear weapons program, since it could produce plenty of uranium for an Iranian nuclear weapons program."

Iran has another mine and mill, but they are not yet operating, he said. That mine is twice as large, though still small from the point of view of a nuclear power program.

The United Nations nuclear watchdog does not inspect Iran's uranium mines and does not know how much uranium Gachin produces, Albright said.

"So the main interest in Gachin is finding ways to ensure that all its uranium is accounted for. Iran has little interest in allowing that right now," he concluded.

Yellowcake, an intermediate stage in processing uranium, is a uranium oxide concentrate which is then heated to remove impurities, the International Atomic Energy Agency says.

Iran had been importing it, Salehi said, but is now mining it and processing it within the country.

Despite Iran's claims that it can now run the entire nuclear fuel cycle without help from abroad, it is not clear that Tehran actually has the technology to turn enriched uranium into fuel rods to run a nuclear reactor.

Russia is supplying the fuel rods for Iran's Bushehr nuclear reactor.

The United States and its allies fear that Iran is trying to produce a nuclear bomb. Iran denies it.

The nuclear talks are set to take place in Geneva, Switzerland, on Monday and Tuesday, said a spokeswoman for Catherine Ashton, the European Union's foreign policy chief.

The spokeswoman said the goal of the talks is to end Iran's nuclear enrichment program.

National Security Council spokesman Hammer said they were "to underscore the concern of the entire international community in Iran's actions and intentions."

It has been more than a year since the Islamic state has had formal discussions with the P5 plus 1.

Iran has been under stiff sanctions over its continuation of uranium enrichment.

Two Iranian nuclear scientists were targeted by bombers on Monday, leaving one dead.

Iran blamed Israel, the United States and the United Kingdom's spy agencies for the attacks, which killed Majid Shahriari and injured Fereydoun Abbasi.

But Salehi said Sunday that the "assassination of Iranian scientists will not hamper our progress."